Culture's Hidden Ledger

Dear friends and all who advocate for better ways of working,
We have a problem.

The leaders who green-light our work need to drive measurable business success. This means that when we propose a change, it should be designed to support their business success.

This is challenging for three reasons.

1. First, busy leaders like simple answers. No shade implied; I like simple answers to my problems, too! But for culture work, the simple answers are always inadequate.

2. Second, there isn't just one answer. Changes ripple. What seems like a wise answer today may become irrelevant or wrong tomorrow. There are no clean boundaries. Perhaps this is why we run into problem three.

3. We use liquid jello language to describe our domains. Change, inclusion, performance, culture...runny words that don't mean anything until they mold to a context.

We use the word culture to describe "what it feels like to work here." Culture is kin to "love", "home", and "puppy." Each person experiences it differently, and it's always changing. It is the wave and the ocean.

An organization's culture is also one of its more important strategic assets.
It eats strategy for breakfast, operations for lunch, and sales for dinner.

Culture chugs performance like light beer at a ball game.

Let's keep this in mind, because today we're going to address these challenges by putting numbers to "culture" work. Not because spreadsheets capture everything, but because they force critical thinking about what we're doing here.

Today's spreadsheet will capture culture math at a high level to help us answer questions like these:

• What is the current way of working costing?

• What do we need to invest to improve it?

• Are our investment choices complementary or contradictory?
  Are we creating value faster than we're eating it?

• What impact should we expect from the investments we're making?

If you missed the last two articles, you're all "Culture... math? What nonsense is this?"

Here's the basic idea.

People do things that they hope will make their organizational cultures better. Training, workshops, treats on Friday. All kinds of stuff they actively choose to spend time and money on.

People also do things every day that bring the real culture to life. Meetings, commutes, Slack emojis, and dirty looks in the lunch room. Maybe they actively decided how they'd do these things, or maybe not. Either way, the everyday things take time and money, too.

So we have all these things that impact culture, some in good ways and others bad. Thinking in culture math terms, these are additions to and deductions from our balance.

It's easier to achieve great top-line results when your cultural balance is high. Revenue, quality, innovation, retention, reputation, efficiency – all the usual suspects in the KPI lineup have ties to the organization's culture.

In the first article, we outlined a basic equation. Then we revisited six case studies through a culture math lens. Using this lens is like using 3D glasses to look at an anaglyph; it doesn't show you anything that wasn't there before, but it sure helps the insights pop out.

The basic culture math equation looks like this.

👉 The logic:

• TCC (A+B+C) = total culture cost, aka what you spend.

• Impact (±) = how culture shows up in business performance.

• RoC  = whether your investments are compounding into advantage, or furiously digging a dank hole.

Now, let's talk about what goes into the spreadsheet.

The (Purportedly) Countable Stuff

In that equation, TCC adds up:

• A = One-time costs, like workshops and special awards

• B = Periodic costs, e.g., the monthly subscriptions and quarterly events

• C = Embedded costs, like the daily habits

Some of those costs are direct expenses, like paying for external training. Some are calculated in people's time, which you can translate to finance by multiplying those minutes by hourly burdened rates.

So - money.

Let's work an example.

Calculating an Investment in Better Decision Making

Assume you want to increase decision velocity and quality (i.e., make better decisions faster).

A typical investment would include:

• Decision Education: To learn effective decision-making processes, and workshops for teams to create their decision matrix

• Decision Software: For collaborating on decisions and reviewing decision performance

• Practice (i.e., Making Decisions): Time spent making and reviewing decisions, getting new employees up to speed, and periodically improving the approach

You can get pretty detailed with these cost estimates. The one-time training fees and the software licenses have explicit costs. It's easy to calculate the cost of time spent in workshops. And depending on the decision-making processes you select, you can also estimate how much time it should take to reach decisions going forward.

An Honest Implementation Cost 

Your total annual investment might look something like this.
(Assuming 100 people with an average burdened rate of $50, because make-believe math should be easy math.)

Add it all up, and the real investment number dwarfs the stand-alone training/workshop fee outlined in a typical proposal.

So:

• Workshop only: $40k (when you add in the cost of people's time, which no one does)

• Actual Implementation needed: $282k

And wow! The bigger number can be pretty daunting.

Until you compare it to the cost of an underdeveloped decision-making system.

The Cost of Ad-Hoc Decision Making

What's the current approach to decision-making costing? Teams that wing it typically:

• Discuss the same decision in multiple meetings.

• Invest hours polishing PowerPoints to convince the boss about a decision.

• Meet about decisions that don't require discussion.

• Make complex decisions without critical input, inflicting unforced errors.

• Reverse and revisit decisions because the "right" people weren’t involved the first time.

• Forget which decisions they made, or why, so they make them again. And again.

• Make decisions that they never write down, then fail to act on them.

• Wait for decisions to be made by someone else. Who? Not sure.

• Route all decisions through higher-ups, engorging the approval bottlenecks.

• Get frustrated with all of the above and just do it! 
  Seek forgiveness, not permission - amiright, cowboy?

If each person spends just 6 hours weekly on decision dysfunction (conservative estimate), you're already at $1.5M annually for a 100-person company. Makes that $282K investment look like a sweet deal, doesn't it?

If you could get this number, it would make the case for one helluva ROI.

How to Apply This to Your Scenario

Practically, you won't get an accurate cost for the before state, because no one tracks the performance of practices that just sort of happen. But you can quickly arrive at estimates.

Ask the team to review a list of common friction points (like the ones above).
Which sounds familiar? How much time would they estimate those take?

The conversation will be illuminating, potentially uncomfortable, and result in a fat-fingered ballpark guesstimate.

When the pain costs more than the cure, stop debating and start building. No brainer.

If it's close, maybe you wait. Maybe there's another part of the system that needs attention first.

That's easier to see when you expand to a full ledger view.

Building a Broader Ledger

In the example above, we looked at a decision-making project and used educated guesstimates to determine that we could save people hours every week. You could expect that to yield a commensurate productivity boost. Look at all the time folks got back for focused work!

Except projects never happen in isolation.

What if, at the same time you're improving decision-making, the CEO decides to mandate a 5-day return-to-office policy?

The CEO giveth, and they taketh away.

Creating a ledger view like this - even one based on educated guesses - gives you a way to think and talk through tradeoffs. Listing your concurrent projects and decisions in one place can reveal whether you're supporting a coherent system or just pitching a collection of random initiatives.

Many organizations manage each investment in isolation - a workshop here, a policy there - without tracking how they interact. The ledger encourages systems thinking.

The potential conflicts between decisions become even clearer when you expand your ledger to consider other forms of capital.

Capital That's Harder to Quantify, And Necessary for Success

Beyond money, business cultures trade in other forms of capital. These include:

• Social Capital → Trust, reciprocity, and networks of relationships that enable collaboration, faster problem-solving, and wider opportunity.

• Intellectual Capital → Knowledge, ideas, and intellectual property that fuel smarter decisions, innovation, and preserve organizational memory.

• Experiential Capital → Practical know-how, skills, and “muscle memory” built through lived experience, practice, and iteration.

• Shared Convictions → The collective sense of purpose, values, and loyalty that drives commitment, alignment, and reduced friction.

• Living Capital → Wellbeing, stamina, and clearheadedness that sustain energy, resilience, and long-term performance.

How are these forms of "capital"?

Consider this: If an organization wants people to speak up when they see a problem with product quality, workplace safety, or delivery times, what do they need?

• Money & time for training and reinforcement about how and when to raise the alarm.

• Shared Convictions: People have to share beliefs about where the bar is. You have to agree on what "good enough" looks like so you can call out anything that isn't.

• Social Capital: They have to trust that they won't be punished for highlighting errors.

You could fill the office with suggestion boxes, Andon cords, and "See something? Say something!" posters, but it wouldn't do a lick of good if social capital is bankrupt.

So instead, we'll assume they have adequate capital to run the training and reinforce the habits. You should expect increases in:

• Intellectual Capital: People will know how to assess, raise, and address problems

• Experiential Capital: They'll experience working and building better. They up their level of craftsmanship.

• Social Capital: Psych. safety increases, and problem-solving networks strengthen

• And if you focus on safety, Living Capital increases when there are fewer injuries.

We have reliable ways to quantify dollars and time. For other forms of capital, we're still developing those measures. Permaculture advocates have long recognized that healthy systems require multiple forms of capital working in balance. Business is slowly catching up.

Just because we can't precisely quantify your group's Social Capital doesn't mean you should ignore it when planning projects. Your ledger can acknowledge these impacts even when the numbers aren't exact.

Let's add columns tracking how our decision-making investment affects each form of capital. We'll use indicators showing the expected impact on each balance.

For decision-making implementation to work, you'll need baseline Social Capital and Shared Convictions. People must share a sense of what they're trying to achieve, what constitutes a good decision, and trust that others will engage in the process.

Then, once you've created decision-making clarity, you should enjoy increases in:

• Social Capital: by improving inclusion and autonomy, and decreasing decision-making conflict.

• Intellectual Capital: as the group improves its decision-making rigor.

• Experiential Capital: as they gain skills in proposing and evaluating decisions, and then improving their approach.

• Shared Convictions: as they align around how to decide, what's been decided, and what makes for a quality decision.

So that's cool! Better decisions and better relationships? Sign me up!

Now, you'd think we could use a sheet like this to make a great case for improving decision clarity, or for skipping an office mandate, but....

You can't eat Intellectual Capital, and shareholders aren't wowed by stockpiles of Shared Convictions.

In the business world, we need to take the next step and tie the investment to business impact metrics.

Calculating Culture's Impact on Performance

Unlike the upfront investments we've been tracking, most organizations already measure performance: revenue, productivity, quality, and retention. These are your lagging indicators, showing what happened after your culture work.

Here's the connection: your culture investments (training, new processes, policy changes) are leading indicators. You make those investments expecting specific performance improvements. Now you want to see whether those improvements show up.

They won't show up cleanly. Performance metrics are influenced by everything: market shifts, supply chain disruptions, customer behavior, economic conditions, and seasonal patterns. Excellent ways of working won’t save you if your market collapses.

So how do you tell if your culture work is making a difference?

Compare your performance against industry benchmarks or your own past performance. The gap shows where culture might be helping or hurting. Not definitively, but directionally.

Look for numbers like these.

In this example, most trends look positive. Revenue and expenses are outperforming the industry. Attrition is improving. But innovation is losing ground despite investments.

This is where the ledger proves itself. When you track both your culture investments (leading) and performance outcomes (lagging) over time, you can ask better questions:

• We invested $282K in decision-making. Did efficiency improve?

• We mandated RTO, claiming it would boost innovation. Is innovation up?

• Where are we outperforming the industry, and what about our culture investments might explain that?

• Where are we falling behind, and what might we need to change?

You won't get clean cause-and-effect. The world is too complex for that. But you can see patterns. You can spot when claimed benefits don't materialize. You can identify what's working well enough to double down on.

Why These Impact Areas

These metrics have two advantages: organizations already track them, and they have industry benchmarks for comparison.

Want to motivate change? Show leaders how they compare to competitors. Suspecting your innovation pipeline could be stronger is one thing. It’s quite another when you see your competitors make bank while you’re still moseying to market.

Research backs up the connection between culture and performance:

• Companies with top-quartile engagement see ~20% higher revenue per employee than bottom quartile (Gallup, 2017) Gallup Source

• Companies with strong cultures attract better talent at lower cost (LinkedIn Talent Trends Report, 2019). LinkedIn Source

• Companies that excel at innovation processes grow 3x faster than competitors (BCG). BCG Source

• High-trust companies outperform S&P 500 by 2–3x over 10 years (Great Place to Work).
  Great Place to Work Source

Do a bit of research and you'll find all kinds of studies showing that thriving cultures outcompete lousy ones.

Net Culture Impact

Add them up to see the overall contribution (or drag) of culture on business outcomes:
Net Culture Impact = Revenue Impact + Quality Impact + Talent Impact + Efficiency Impact + Innovation Impact + etc.

This won't give you a perfect ROI calculation.

It gives you something more useful: visibility into whether your culture portfolio is working as a system, where it's succeeding, and where you need to adjust course.

We've built the ledger piece by piece: costs, capital impacts, and performance metrics. Now let's talk about what this means for how we work.

The Complete Ledger Exposed

1. The current market incentives are backwards.

Clients want cheap, fast culture fixes. Consultants deliver what gets bought.

But selling a workshop as culture change is like selling a gym membership as fitness. The benefits only show up after the heavy lifting.

Notice something in that table? The training by itself has zero intended impact. That's not a typo. Workshops don't change cultures on their own. Only sustained practice does.

This isn't news to any of us, but it might be to those we serve.
We can make it easier for people to understand what they need to do to build on the workshop’s good start.

2. Leaders who call culture work "soft" are either ignorant or negligent.

The ROI is calculable, the impacts are measurable, and ignoring both is incompetent.

Looking at the return to office mandate, we can record the CEO's claim that it will increase innovation and productivity, while also acknowledging the impact on employee well-being. We can also recognize that just commuting into an office isn't enough to positively impact Social Capital, unless you also ensure people talk to each other while they're there. To get the talking guarantee, you'll need scheduled events, meeting space, maybe an on-site café... adding several more lines to your ledger. These are real business tradeoffs that deserve thoughtful consideration.

Finally, we have industry evidence that suggests remote and hybrid employees faced with these policies are more likely to seek a new job. This may also be an intended impact. Do you intend to impact retention? That deserves a spot on the ledger, too.

3. We can do better. But only if we stop managing culture as individual initiatives and start treating it as an integrated system.

The ledger reveals whether investments reinforce each other or work at cross-purposes. That's the difference between culture work and culture systems.

Think about what becomes possible when you can see a bigger picture. You can spot when well-intentioned policies undermine each other before you implement them. You can make the case for culture investments using the same language leaders use for every other strategic decision. You can show stakeholders exactly what they're trading off when they make policy choices.

Most importantly, you can finally move beyond hoping your workshops will stick. Instead, you're designing systems where the follow-through is expected, the contradictions visible, and the impact trackable.

For those of us who got into this work to make organizations more human and effective, this approach offers a way to translate good intentions into measurable change and be more accountable to the people we serve.

Working with Us: If you’d like to explore how we can help your organization, please check out our services here.